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Characteristics of Money



Money in generally any item or variable that is can accepted as payment of goods and services.  Money has several functions but the main purpose are: medium of exchange, unit of account and store of value.  Any object or item that can satisfy the above functions can be considered as money. Money is the reason we get things that we want and desire.



Individuals need to have money whenever they need it and wherever the need arises. People need to carry money with them as they undertake their daily businesses. Money should be able to be moved from one location to another with ease. Modern day money can easily be carried in wallets in form of notes, coins, debit and credit cards.



Money must be able to last for a long period. Object used for currency should be able to withstand physical wear and tear for a reasonable period of time.  Money should have the potential to be used several times without getting damaged. Modern day money is made of paper, metal and plastic hence can last longer.



Because money is used for measuring unit of value, it should be easily divisible into smaller denominations based on the standardized method. Unlike old times when people used tobacco and stones in place of money which were hard to divide due to lack of standardization, modern day money consists of notes and coins with different values hence easily divisible. To read more about money, just go to https://en.wikipedia.org/wiki/Financial_planner#Process.



Uniformity of money is another very vital feature about money. Any two units of currency should be able to buy the same thing: that is they should be uniform or the same in the terms of what they can buy or pay for. Old currency used stones and tobacco leaves which were different from one place to another, but modern day notes are homogeneous wherever they are used. Get the apr formula here!



Money should be acceptable to both parties of a trading activity. Everyone taking on a trading activity must be able to exchange the money for the same. Money must not only be acceptable by trading parties but also be universally accepted as a medium for payment of goods and services.


Limited supply

In order to have an economic balance availability of money must be in limited quantity. If there is too much availability of money, people will not create value for it as it is readily available. Currently governments are responsible for controlling the supply of money. Know about compounding calculator here!